When: July 19, 12:00 PM
With the number of customers buying out their lease significantly increasing over the last few years, the short and long-term financial implications on dealerships’ bottom lines are significant. Shrinking lease portfolios puts pressure on dealers to create a sense of urgency with customers to support new vehicle sales and drive customer loyalty.
When customers buy out their lease, their loyalty is immediately at risk, threatening sales revenue, service revenue and pre-owned inventory. While some dealers are putting off engaging their lease customers until their inventory normalizes or OEM returns, increased competition and sky-high equity emphasize why proactive dealers stay ahead of the curve by maintaining consistent communication with their audience.
Join automotiveMastermind’s Joshua Dail and S&P Global Mobility’s Matt Derenthal to explore why proactively and consistently engaging lease customers is key to preventing buybacks and achieving sustainable dealership success.
This past month the CATA installed two Level 2+ EV charging stations at the CATA offices in Oakbrook Terrace. As you may know, securing EV charging stations is challenging, but the CATA was able to quickly source and install the chargers though it’s Chicago Auto Show partnership with Autel.
One 2-port charger is located in the parking lot on the west side of the building and the second 2-port charger is located in the indoor parking garage. The chargers are capable of sending up to 19.2 kWh to a single vehicle or 9 kWh to two vehicles. Members visiting the CATA can charge their vehicles by downloading the Autel app, which is available for both Android and iOS phones, or visiting the reception desk for a RFID charge card. The cloud-controlled charging stations can be remotely enabled and allow for the public, employees and customers to have different charging rates.
Demos are available anytime, Monday-Friday from 9a-5p. Please contact Mark Bilek at the CATA to arrange for a time.
For the past few years, ACV Auctions has been a valued asset to CATA Members utilizing their services in the ever-changing used car market. Signing up with ACV is FREE and has no subscription fees.
Did You Know:
To join ACV Auctions and/or get more information, please contact Collin Rosenbaum at your firstname.lastname@example.org.
As my term in office as 2022/2023 CATA Chairman comes to an end and I take over responsibilities for the 2024 Chicago Auto Show, I would like to reflect on the many CATA accomplishments during the past year.
After two years of Covid, 2022/2023 brought some normalcy back to the CATA. However, we were not bereft of challenges.
On the legal front, we remain hopeful that the legal challenge to Rivian filed several years ago will ultimately prevail.
We are also extremely supportive of the State of Illinois’ efforts to uphold the recent warranty modifications which have been challenged in a lawsuit filed against the state by Volkswagen Group of America, Inc. The CATA recently responded to a discovery request in this matter.
The CATA also responded to a discovery request in the dealer suit brought against Ford Motor Company challenging the legality of Ford programs involving the sale and distribution of electric vehicles.
Finally, the CATA determined that in the interest of dealer unity it would set forth a generous proposal to settle its ongoing litigation with a group of dealers who defected from the New Car Dealer committee to strike their own agreement with Local 701. That litigation has now been settled, and the CATA has invited each of those dealers to rejoin the CATA and hopefully avail themselves of the benefits the CATA provides.
I think we know that the Chicago Auto Show is the financial engine that drives many of the CATA activities. The 2023 Auto Show was a greatly enhanced version of the two previous (Covid) shows, with increased exhibit space (back to both the North and South halls in McCormick Place,) a well-attended and profitable ($2.6 million) First Look for Charity, seven indoor test tracks and four outdoor test drive opportunities, and greatly expanded media and social media coverage.
Leading the way to the 2023 Chicago Auto Show was a new event, Chicago Drives Electric, held last fall, also with terrific media coverage and available test drives for consumers. This event was so well received by OEMs and customers that it will be repeated this year at the end of September.
The CATA Media Strategy Committee directs approximately $500,000 in CATA funding per year, with extraordinary enhancements provided by our media partners, toward the Chicago Auto Show, Chicago Drives Electric, BBQ for the Troops, DriveChicago, and other worthwhile events.
The CATA Civic and Dealer Relations Committee continued with the sixteenth year of the Chicagoland Dealers Care program, with continued CATA funding and CATA contributions to dealer-sponsored charity events in the community; and with the tenth BBQ for the Troops, which has to date raised over $1 million for the USO.
The CATA Government Relations Committee directs the approximate $130,000 the CATA annually contributes to state and local officials, and well as the funds that NADA annually contributes to federal officials representing Illinois. The Committee also monitors pending bills in the Illinois legislature and consults with our Springfield lobbyist, Scott Marquardt, to take appropriate action as needed. The Committee works hand in hand with NADA, attending the annual NADA Washington Conference, meeting with Congressmen, and encouraging dealers to contribute to NADA PAC.
The CATA Drive Chicago Committee is in the midst of a major restructuring of the DriveChicago website in its efforts to maintain DriveChicago as the definitive website for vehicle purchases in the Chicagoland area.
The CATA Finance, Pension, Audit, and Compensation Committee has worked diligently to find ways to increase CATA revenues and decrease costs, ensuring that the CATA remains a dominant source of dealer benefits in the future. The reduced Board of Directors size and reduced number of staff have led to cost efficiencies and better management. Aligned in this mission, the CATA Member Benefits Committee continually researches and vets allied companies in an effort to provide worthwhile programs and cost efficiencies to CATA members and to the CATA itself.
The CATA Employee Benefits Committee continually seeks out new ways to provide benefits to all CATA members at reasonable costs. To that end the Committee is examining alternative roles that the CATA can play in providing the important member benefits the CATA provides.
The CATA Nominating Committee recently reached out to the entire dealer body, and will continue to do so, to seek out qualified hand raisers to serve on the CATA Board of Directors. The Committee is dedicated to choosing knowledgeable candidates of the highest integrity to serve on the CATA Board.
My appreciation goes out to the 13 members of the CATA Board of Directors who served so diligently this past year; to the CATA staff, especially Jen Morand, who completed her first year as CATA Co-President, Dave Sloan, who will be serving his final year in 2023/2024 as CATA Co-President, and Chis Konecki, who serves as Executive Vice President and is so knowledgeable about the Chicago Auto Show. Also, I am grateful for the continued wise counsel provided by our longtime General Counsel, Dennis O’Keefe.
I congratulate Kelly Webb Roberts on her election as CATA Chairwoman for 2023/2024. Kelly comes from a great automobile family, is extremely able and dedicated, as will provide strong leadership during the upcoming year.
Here is a link to a summary of actions taken by the CATA Board of Directors during the past twelve months.
CATA Chairman 2022/2023
Staying late at the office. Covering another employee's shift. Going the extra mile for a customer. Employees at Raymond Chevrolet and Raymond Kia, both in Antioch,, are rewarded with cash bonuses for these efforts — an incentive that owner Mark Scarpelli said has improved employee retention and workplace attitude.
Exemplary employee behavior is met with a "Q-card." The "Q" stands for quality. The cards, which detail how the employee excelled, are cashed for a $25 bonus.
At the end of every month, employees gather for Cake Day, where they socialize and news updates are shared. More anticipated, however, is the chance to receive an even bigger monetary reward. The names of employees who received a Q-card — typically eight to 10 each month — are placed in a bucket. The employee whose name is drawn from the bucket receives a "crisp $100 bill," Scarpelli said.
"Sometimes it's really easy to focus on areas where we need to improve or things that somebody may have done wrong and actions that we need to correct," said Dina Vogt, CFO of Ray and Raymond Automotive Group, which includes the Chevy and Kia dealerships. "This really makes all of the managers more cognizant of encouraging the good."
The Q-card practice has been used for more than 10 years at the two dealerships. Vogt said the stores' annual turnover runs in the low 20 percent range, consistently lower than the average dealership turnover tracked by the National Automobile Dealers Association. That industry turnover number was 34 percent in 2021, the most recent year for which data is available, according to NADA.
According to Scarpelli, the 2017 chairman of NADA, the automotive industry "is not famous for keeping people around for a long time." Despite this, 10 percent of his staff has been with the dealerships for over 25 years. One employee, nicknamed "Employee No. 1," has worked for the group for 49 years.
The average employee has been at a Raymond dealership for around eight years — which Scarpelli and Vogt attribute to the culture that consistent positive reinforcement creates.
"Along the way, we've been able to keep a lot of long-term employees, people that are second-generation employees, third generations, sons and daughters that have started to work here," Scarpelli said. "That is one of the biggest benefits of all. It's a testament to what we collectively do. … It instills in them ownership and a sense of worth, really just wanting to see things prosper at the place that they call home."
Cake Day also serves as a chance for different teams within the dealerships to bond, Vogt said. If somebody in one of the parts departments gets the $100 award, the entire team takes pride in the accomplishment, she said.
"They feel like, if one of them won, they all won," Vogt said. "Its nice to see the departments root for each other."
And the event alone can be as much of an incentive for employees to bond and celebrate each other. As Vogt said, "it's always all about the cake."
Ray and Raymond Automotive Group sells six vehicle brands across four dealerships in Illinois. The Q-card practice is used at Scarpelli's Chevrolet and Kia stores in Antioch, which combined employ up to 120 employees and sold 2,750 new and used vehicles in 2022. The other two Raymond dealerships, in Fox Lake, Ill., have other programs for employee appreciation.
Source: Automotive News
The Chicago Auto Trade Association (CATA) today announced a new partnership to benefit its 400 dealer members and their employees. Dubbed the CATA Retirement Program, the 401(k) offering combines the power of the National Auto Dealers Association’s “NADA Retirement from Empower” program and the local expertise of Chicago companies, Financial Renaissance and Correll Co.
“This partnership brings the ‘best of breed’ retirement plan solutions to all CATA dealer members,” said Joseph Orlando, CEO of Financial Renaissance. “This new model combines the power and voice of the NADA with its 16,000 members, the award-winning technology of Empower -- the 2nd largest 401(k) provider in the country and marries it with Financial Renaissance -- a Chicago-based financial services company, as the exclusive broker on the plan.”
“The power of the NADA and Empower combined with the soft, service-based, touch of local partners is a powerful advantage,” said CATA Member Benefits Committee Chairman Dan Marquardt. “These strengths, combined with enhanced 3(38) fiduciary protection and low mutual fund fees, allow the CATA members access to protections they currently may not have or may not have been eligible for in their current retirement plans.”
The Chicago Automobile Trade Association Member Benefits Committee works to establish and maintain preferred partner relationships with allied members of the association with programs offering unique value to our dealer members and the CATA.
“Many small business owners don’t fully understand the exposure and liability their company 401(k) plans thrust upon them. We wanted to address that problem and relieve of some of that burden,” said Orlando. “That is the ingredient Correll Co. brings to the partnership.”
CATA dealers interested in learning more or seeking to schedule a plan comparison can do so by calling Joseph Orlando at 312-404-3232.
The Federal Trade Commission's proposed new rules on auto dealerships would cost customers time and dealers money, a new Center for Automotive Research study concludes. In June 2022 the FTC proposed requiring expanded disclosure and consent on finance-and-insurance products and physical accessories "not provided to the consumer or installed on the vehicle by the motor vehicle manufacturer." The agency also is considering cracking down on dealerships' statements related to the cost or financing of the vehicle itself, seeking to curtail bait-and-switch pricing and lower monthly payments that mask higher overall cost to a consumer. The agency has not taken further action on its plan following the close of a public comment period last year.
Under the FTC's plan, the average consumer would spend two more hours on a vehicle transaction, the Center for Automotive Research wrote in a May analysis based upon polling more than 60 dealerships. NADA opposes the rules and has requested that the FTC withdraw them, calling the agency's plan "severely flawed both as a matter of law and public policy."
According to the study, the automotive retail industry would also incur between $18.69 billion and $22.34 billion in additional compliance expense over the course of a decade because of the FTC rules — more than 10 times the $1.36 billion to $1.57 billion predicted by the agency. An individual dealership location would spend a median $46,950 in upfront cost and $50,958 in recurring expense every year to comply with the regulation, the survey found.
Under the FTC's proposal, customers can't buy physical accessories or F&I products — both of which the FTC designates as "add-ons" — without first declining in writing the option to buy or finance the vehicle by itself at the corresponding amount. A manager also must sign the document.
The proposal also calls for customers to provide "express, informed consent" and receive cost information about "add-ons" before a dealership can charge them for or help them finance any of those products. Prechecked boxes or a "signed or initialed document, by itself" doesn't qualify, the agency said. Consent must be "unambiguous" and, in the case of physical transactions, oral.
When the compliance cost figures were combined with the value of two more hours of customer time — priced at $22.20 per hour by the FTC — per transaction, the Center for Automotive Research put the net cost of the regulations over 10 years at between $38.06 billion and $45.87 billion. That's significantly different than the $29.72 billion to $34.77 billion in net benefit predicted by the FTC.
Under the FTC's proposal, dealerships would need to list an out-the-door cash price they would honor for any specific vehicle or financing term they advertise. However, the same requirement applies to the dealership's first response to a customer's inquiry about a vehicle. The regulation imposes other disclosure rules on a dealership's discussion of monthly payments as well as "add-ons."
Read the full Automotive News article here.
This year's USO BBQ for the Troops one-day fundraiser will take place on Saturday, July 15 across the Chicagoland area. And this year's event is a big one - the 10th Annual BBQ!
The CATA and area new-car dealers partnered with the USO Illinois to create the Barbecue for the Troops campaign to raise money for our local troops and their families. What started as a few hot dogs and tin can has now grown into an annual festival which brings in thousands of dollars. In fact, the program’s lifetime total is over $1 million raised for USO Illinois!
As a participating dealer, the CATA will provide you with a starter kit of marketing materials you will need to get started including outdoor signage, posters and a social media toolkit. The CATA also runs an area-wide marketing and advertising campaign which includes a listing of all participating dealers and is an excellent opportunity for media exposure.
The 2022 event had 63 participating new-car dealers who hosted events that ranged from online fundraisers to full-blown community summer festivals that included a 21-gun salute, live music, bounce houses, and, of course, a delicious barbecue meal. This year, the CATA’s aiming for 100 participating dealers; help us reach our goal and bring us back to pre-pandemic participation levels!
As we know, dealers have deep roots in their communities and by participating in the Barbecue for the Troops program, dealers can further connect with their customers and contribute to a great cause.
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A loophole enables car shoppers to get the EV they want and qualify for a full $7,500 tax credit – sort of. All customers must do is lease instead of buy. Only a few vehicles qualify for the federal EV tax credit if purchased by the consumer. But, thanks to this loophole, all battery-powered models qualify for the full credit if they're leased, because in that case the IRA categorizes them as commercial vehicles.
More information is available here: https://electrek.co/2023/04/05/how-to-bypass-nearly-every-restriction-of-the-ev-tax-credit-by-leasing/.
CATA Approved Partner ACV Auctions is providing a limited number of Live Appraisal Events free of charge to CATA dealers participating in the USO BBQ for the Troops event this coming July. For these events, ACV partners with dealers by having an inspector at the dealership to assess trades and launch the customer’s vehicle onto the ACV network for an instant appraisal. ACV can also assist participating dealers with marketing materials for the event.
Below are links to a video and presentation for more detailed information on the Live Appraisal Events.
For more information contact ACV Regional Sales Director Collin Rosenbaum at (260) 265-0144 or email@example.com . This opportunity is limited to a handful of CATA dealers and is on a first-come, first-served basis.
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